Biography of Justice A. A. SAYED, J.

He was born on January 21, 1961, and graduated from Bombay University with a bachelor’s degree in law in 1984. He served on the Central Government Panel of the Bombay High Court (Senior Counsel Group-I). He was also an Assistant Government Pleader on the Original Side of the Bombay High Court.

On behalf of the Union of India/State Government, he has appeared in Public Interest Litigation cases involving mangroves, garbage dumping, free/concessional medical treatment for the needy in charitable hospitals, biomedical waste, and malnutrition, among others. He served on the panel of various Public Undertakings and represented them in arbitrations. He was also a Government of India Notary Public. He is a die-hard sports fan.

Justice Amjad A Sayed of the Bombay High Court has been recommended for elevation to Chief Justice of the Himachal Pradesh High Court by the Supreme Court Collegium. On behalf of the Centre and the Maharashtra Government, he has appeared in PILs concerning mangroves, waste dumping, and concessionary care for the needy in charitable hospitals, among other issues.

CIT VS. DARBHANGA MANSION CHS LTD.


Issue

The ITAT was correct in accepting the Assessee’s argument that the contribution of Rs. 39,68,000/- given towards the “heavy repair fund” is covered by the principle of mutuality and is not chargeable to tax when it upheld the CIT(A )’s and rejected the departmental appeal.


Facts of the Case

Co-operative Housing Society is the assessed entity. It got Rs. 39,68,000 on account of the transfer of the apartment and the garage and added it to the “general amenities budget” and the “maintenance fund.” The Assessee claims that this receipt for Rs. 39,68,000 is tax-exempt. For the Assessment Years 2005–2006, a return of income was filed, declaring no income. The request was processed, and after following all legal procedures, the assessment officer determined that, if the assessee’s only source of income is interest on fixed deposits and interest on savings bank accounts, then the money in question is simply a receipt for the transfer of the flat and garage, namely Flat Nos. 12B and 2A. By ruling that the mutuality principle will not apply, the Assessing Officer denied the exemption.

However, citing Sind Co-operative Housing Society v. ITO 317 ITR 47, the CIT(A) and Tribunal upheld the assessee’s claim.

Judgement

In the instance of the Assessee Society, the exact same problem and question kept coming up. The Revenue has repeatedly failed to persuade the Tribunal that the case of Sind Co-operative Housing Society (supra) does not apply to the Society’s situation. The donation is made to the general fund or the repair fund and is acknowledged as such. While it may be true that the incident was caused by the transfer of a flat and garage, we do not see how the concept of mutuality cannot be used in this situation just because there was a cap or restriction set on the transfer fees or their amount. The Counsel for the Revenue has utterly disregarded the fundamental idea of a cooperative movement. If a cooperative housing society receives anything more than Rs. 25,000, according to the Revenue, it makes a profit. There must be evidence presented that directly relates to this topic. If the cash received is greater than Rs. 25,000 and is related to the transfer of a flat, then a different approach would be appropriate. However, the sum that the Society got when the apartment and garage were transferred has been hotly debated in the current instance. It must therefore be assumed that it is just transfer fees. Although it may have been added to the fund to show that it is only a voluntary contribution or donation to the Society, it still counts as income. However, the Revenue must have material on file in order to make such a conclusive determination. Beyond suggesting that it has been received at the time of a flat transfer and credited to such a fund, it will not be sufficient to overturn the concept established in the Sind Co-operative Housing Society’s ruling.

Therefore, the Revenue’s endeavour only entails overturning the court’s final and conclusive ruling. The reception in this case may have been caused by the transfer, but the principle of mutuality will still apply, according to the Commissioner and the Tribunal. The Division Bench’s guiding premise is based on a normal connection between a member of a co-operative society, particularly a housing society, and the Society, which is a body corporate and a separate legal entity. The cooperative movement is both an ethical and socioeconomic movement. Article 43A of the Indian Constitution currently recognizes it. The government promotes the development of cooperative societies in order to foster and encourage the spirit of brotherhood and cooperation. The amenities, advantages, and benefits are shared by all members, regardless of whether they individually own apartments or immovable property. The phrases “flat” and “housing society” are specified in the relevant statute to mean that the Society, as a legal organization, owns the building but that the facilities are provided.

Therefore, we do not see any cause to depart from the standard established in the Sind Co-operative Housing Society case, which was decided by the Supreme Court. Therefore, in this instance, the Tribunal dismissed the Revenue’s appeal and upheld the Commissioner’s findings by adhering to its prior opinions and applying the reasoning of this decision. Therefore, the concurrent findings in this instance are consistent with the factual evidence submitted for record. The claim made by Mr. Irani that the Assessing Officer had the evidence in the form of the Society’s bylaws in front of him has some merit. The bye-laws, which also require a sum of Rs. 25,000 for transfer costs, are in accordance with the Government Resolution. We find that the Assessing Officer has been correctly corrected by the Commissioner since the Assessee in this case is considered to have only received transfer fees. It is this underlying premise that prompted the Assessing Officer to make the decision that she did. The amount and in its totality as credited could not be presumed to constitute transfer fees in the absence of any substantive, cogent, and satisfying. The transfer of the apartment and garage may have been the reason for its receipt. Given these facts, we do not believe that the Tribunal’s decision to reject the Revenue’s appeal was based on any legal error that is obvious from the record. Its structure cannot be described as twisted. The appeal is rejected because it lacks merit. No cost-related order.

Reference

1. CIT Vs Darbhanga Mansion CHS Ltd (Bombay High Court), Appeal NO, 1474 OF 2012

2. JUSTICE A. A. SAYED, High Court of Bombay  https://bombayhighcourt.nic.in/processjshowReq.php?bhcpar=bmlkPTM=

By: Anjali Tiwari, Chandigarh University (LLB 1st Year)

He was born on January 21, 1961, and graduated from Bombay University with a bachelor’s degree in law in 1984. He served on the Central Government Panel of the Bombay High Court (Senior Counsel Group-I). He was also an Assistant Government Pleader on the Original Side of the Bombay High Court.

On behalf of the Union of India/State Government, he has appeared in Public Interest Litigation cases involving mangroves, garbage dumping, free/concessional medical treatment for the needy in charitable hospitals, biomedical waste, and malnutrition, among others. He served on the panel of various Public Undertakings and represented them in arbitrations. He was also a Government of India Notary Public. He is a die-hard sports fan.

Justice Amjad A Sayed of the Bombay High Court has been recommended for elevation to Chief Justice of the Himachal Pradesh High Court by the Supreme Court Collegium. On behalf of the Centre and the Maharashtra Government, he has appeared in PILs concerning mangroves, waste dumping, and concessionary care for the needy in charitable hospitals, among other issues.

CIT VS. DARBHANGA MANSION CHS LTD.


Issue

The ITAT was correct in accepting the Assessee’s argument that the contribution of Rs. 39,68,000/- given towards the “heavy repair fund” is covered by the principle of mutuality and is not chargeable to tax when it upheld the CIT(A )’s and rejected the departmental appeal.


Facts of the Case

Co-operative Housing Society is the assessed entity. It got Rs. 39,68,000 on account of the transfer of the apartment and the garage and added it to the “general amenities budget” and the “maintenance fund.” The Assessee claims that this receipt for Rs. 39,68,000 is tax-exempt. For the Assessment Years 2005–2006, a return of income was filed, declaring no income. The request was processed, and after following all legal procedures, the assessment officer determined that, if the assessee’s only source of income is interest on fixed deposits and interest on savings bank accounts, then the money in question is simply a receipt for the transfer of the flat and garage, namely Flat Nos. 12B and 2A. By ruling that the mutuality principle will not apply, the Assessing Officer denied the exemption.

However, citing Sind Co-operative Housing Society v. ITO 317 ITR 47, the CIT(A) and Tribunal upheld the assessee’s claim.

Judgement

In the instance of the Assessee Society, the exact same problem and question kept coming up. The Revenue has repeatedly failed to persuade the Tribunal that the case of Sind Co-operative Housing Society (supra) does not apply to the Society’s situation. The donation is made to the general fund or the repair fund and is acknowledged as such. While it may be true that the incident was caused by the transfer of a flat and garage, we do not see how the concept of mutuality cannot be used in this situation just because there was a cap or restriction set on the transfer fees or their amount. The Counsel for the Revenue has utterly disregarded the fundamental idea of a cooperative movement. If a cooperative housing society receives anything more than Rs. 25,000, according to the Revenue, it makes a profit. There must be evidence presented that directly relates to this topic. If the cash received is greater than Rs. 25,000 and is related to the transfer of a flat, then a different approach would be appropriate. However, the sum that the Society got when the apartment and garage were transferred has been hotly debated in the current instance. It must therefore be assumed that it is just transfer fees. Although it may have been added to the fund to show that it is only a voluntary contribution or donation to the Society, it still counts as income. However, the Revenue must have material on file in order to make such a conclusive determination. Beyond suggesting that it has been received at the time of a flat transfer and credited to such a fund, it will not be sufficient to overturn the concept established in the Sind Co-operative Housing Society’s ruling.

Therefore, the Revenue’s endeavour only entails overturning the court’s final and conclusive ruling. The reception in this case may have been caused by the transfer, but the principle of mutuality will still apply, according to the Commissioner and the Tribunal. The Division Bench’s guiding premise is based on a normal connection between a member of a co-operative society, particularly a housing society, and the Society, which is a body corporate and a separate legal entity. The cooperative movement is both an ethical and socioeconomic movement. Article 43A of the Indian Constitution currently recognizes it. The government promotes the development of cooperative societies in order to foster and encourage the spirit of brotherhood and cooperation. The amenities, advantages, and benefits are shared by all members, regardless of whether they individually own apartments or immovable property. The phrases “flat” and “housing society” are specified in the relevant statute to mean that the Society, as a legal organization, owns the building but that the facilities are provided.

Therefore, we do not see any cause to depart from the standard established in the Sind Co-operative Housing Society case, which was decided by the Supreme Court. Therefore, in this instance, the Tribunal dismissed the Revenue’s appeal and upheld the Commissioner’s findings by adhering to its prior opinions and applying the reasoning of this decision. Therefore, the concurrent findings in this instance are consistent with the factual evidence submitted for record. The claim made by Mr. Irani that the Assessing Officer had the evidence in the form of the Society’s bylaws in front of him has some merit. The bye-laws, which also require a sum of Rs. 25,000 for transfer costs, are in accordance with the Government Resolution. We find that the Assessing Officer has been correctly corrected by the Commissioner since the Assessee in this case is considered to have only received transfer fees. It is this underlying premise that prompted the Assessing Officer to make the decision that she did. The amount and in its totality as credited could not be presumed to constitute transfer fees in the absence of any substantive, cogent, and satisfying. The transfer of the apartment and garage may have been the reason for its receipt. Given these facts, we do not believe that the Tribunal’s decision to reject the Revenue’s appeal was based on any legal error that is obvious from the record. Its structure cannot be described as twisted. The appeal is rejected because it lacks merit. No cost-related order.

Reference

1. CIT Vs Darbhanga Mansion CHS Ltd (Bombay High Court), Appeal NO, 1474 OF 2012

2. JUSTICE A. A. SAYED, High Court of Bombay  https://bombayhighcourt.nic.in/processjshowReq.php?bhcpar=bmlkPTM=

Image Source: Indian Express

Aishwarya Says:

If you are a lawyer or a law student who is looking for a job, then you can find details about the latest openings here.

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at secondinnings.hr@gmail.com

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.